Great news! The President made permanent the IRA charitable rollover as part of the latest tax bill signed late last week. But…
YOU MUST ACT FAST! To leverage the tax benefits in 2015, the IRA rollover must be transferred by December 31!
The IRA charitable rollover allows individuals age 70 ½ or older to make a rollover gift of up to $100,000 from their IRA to one or more qualifying charitable organizations. Charitable deductions are limited to 50% of a taxpayer’s adjusted gross income for a calendar (tax) year. Taxpayers that make significant charitable gifts will benefit from the rollover because this gift is excluded from the charitable deduction percentage limit.
Donations are excluded from the taxpayer’s income and will count as part of the IRA owner’s required annual withdrawal. The rollover must be distributed directly from the IRA custodian to the designated non-profit. (Rollover contributions are limited to specific qualifying charities – churches are eligible to receive these gifts.)
Here are the details you need to share with those in the qualifying age bracket:
- The provision allows someone over 70 1/2 years of age to donate up to $100,000 of their IRA assets to a charitable organization.
- The donor’s contribution can satisfy the required minimum distribution for the year and does not have to be counted as taxable income.
- Those who qualify to make this gift need to seek counsel from their tax attorney or licensed financial planner for the details.
We are now witnessing the greatest transfer of wealth in history.
As reported by CNBC, a new study from Boston College Center on Wealth and Philanthropy projects that heirs, charities, and taxes will receive $59 trillion between 2007 and 2061. (Yes, that’s trillion with a T!) This is up from a 1999 projection of $41 trillion.
Charities in particular are forecast to receive more than $6 trillion of this wealth transfer, while total gifts to charity during this period are expected to be more than $27 trillion.
In this series on legacy generosity, I have shared with you a top ten list, a $1 M story, my family’s own personal legacy giving journey, the language of legacy giving and reasons for giving a legacy gift.
Let’s wrap up this series with something practical, shall we?
Let’s talk about actually implementing a legacy giving strategy!
Legacy giving can have an amazing impact on your ministry. According to my friends at the Association of Fundraising Professionals (AFP), there are many reasons for someone to consider giving a legacy gift from an institutional perspective as it may provide an opportunity to give with income and estate tax deduction.
- It may offer the opportunity to give with income and estate tax deduction.
- It may offer the opportunity to enjoy either a fixed or variable income or even supplement retirement income.
- If highly appreciated assets are contributed, it may avoid or lessen capital-gains tax liabilities.
- It may offer opportunity for increased income compared to other investments.
- It may allow competent management of assets transferred as gifts.
- It may allow donor to pass an asset to an heir after an established period of organizational use.
We’ve been camping out on the topic of legacy giving lately. Legacy giving can have a high impact for both you and your church members. Once you understand the potential behind legacy giving, it can change your ministry!
Reality for many church leaders is that the fundamentals of legacy giving is sort of an unknown. Most pastors simply aren’t trained in the details of legacy financial planning, so this is where I love to come alongside you with hands-on help.
Let’s get really practical about legacy gifts, shall we? This post is meant to help you gain a basic understanding of legacy giving options so you feel comfortable having conversations with people considering these types of gifts for your church.
It was 2001 when Andrea and I first revised our wills and created a basic estate plan.
At that time, we were doing what every young parent should do—put a will in place so that we could determine what would happen to our children and our belongings upon our deaths. If you don’t have a will when you die, then the State determines what happens to your children and your belongings. If you don’t have a will, make one now!
But I have a confession to make. When we executed those documents, charitable giving was not on our minds. I had never been approached by anyone to consider a charitable gift in my will. It wasn’t that I was unwilling to do it, but obviously I didn’t have a clue.
He sat quietly at a side table; dignified salt and pepper hair. Conversation buzzed around him.
The discussion in the room centered around the success of a recent generosity initiative. The next step involved planning appropriate follow-up strategies for the fulfillment phase.
Of the numerous suggestions that came, one involved legacy giving. So he waited for an opportunity before speaking as he had an important story to tell.
How often does the topic of legacy giving come up at your church? Once a quarter? Twice a year? Better yet, what is legacy giving? Legacy giving involves a “deferred gift.” It is a gift one decides to give at a future date, either years from now or at death. It is a present decision to make a future gift.
Most people leave or bequeath these types of gifts through their will or estate plan. Unfortunately, gift planning is rarely discussed in churches across America. Why? Check the list below and tell me if your reason is somewhere on this list.
Recently I had the opportunity to connect with Rob Kuck of Philanthrocorp. We discussed some of the changes that are coming in tax law if the looming “fiscal cliff” isn’t resolved by December 31.
Several options are being discussed, including one that would limit and/or entirely eliminate tax deductions for charitable contributions. Additionally, estate tax changes are on the horizon. Here are notes from our conversation.
What possible implications in the charitable tax area that might result from the looming fiscal cliff we are hearing about in the news?